Software Engineering Institute

The Graphics Device Interface (GDI) is component of the Microsoft Windows user interface. Windows Metafile (WMF) and Enhanced Metafile (EMF) are image file formats primarily used by the Windows operating system.

Per Microsoft Security Bulletin MS08-021:
A remote code execution vulnerability exists in the way that GDI handles integer calculations. The vulnerability could allow remote code execution if a user opens a specially crafted EMF or WMF image file. An attacker who successfully exploited this vulnerability could take complete control of an affected system. An attacker could then install programs; view, change, or delete data; or create new accounts.
...
What causes the vulnerability?
The vulnerability is caused by a buffer overflow when GDI improperly processes a malformed header in a specially crafted EMF or WMF image file.

There is a public report on the Symantec Security blog which indicates exploit code that targets this vulnerability is being actively developed.

By convincing a user to view a malicious image a remote, unauthenticated attacker may be able to execute arbitrary code. Note that Internet Explorer, in its default configuration, can automatically launch the Windows Picture and Fax Viewer as the result of viewing a web page and may be used as an attack vector.

Upgrade
Microsoft has released an update to address this issue. Users are encouraged to see Microsoft Security Bulletin MS08-021 for more information.

Block access to Windows Metafiles at network perimeters

By blocking access to Windows Metafiles using HTTP proxies, mail gateways, and other network filter technologies, system administrators may also limit potential attack vectors. Filtering based just on the WMF file extensions or MIME type application/x-msMetafile will not block all known attack vectors for this vulnerability.